Robbins Geller Rudman & Dowd LLP announces that purchasers or acquirers of NeoGenomics, Inc. (NASDAQ: NEO) securities between February 27, 2020 and April 26, 2022, inclusive (the “Class Period”) have until February 6, 2023 to seek appointment as lead plaintiff in the NeoGenomics class action lawsuit. Captioned Goldenberg v. NeoGenomics, Inc., No. 22-cv-10314 (S.D.N.Y.), the NeoGenomics class action lawsuit charges NeoGenomics and certain of its top executives with violations of the Securities Exchange Act of 1934.
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CASE ALLEGATIONS: NeoGenomics provides cancer tests and testing services to doctors, clinics, hospitals, and pharmaceutical companies. Among NeoGenomics’ portfolio of tests are next generation sequencing (“NGS”) tests.
The NeoGenomics class action lawsuit alleges that throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (i) NeoGenomics was anything but a “one-stop-shop” for cancer testing because it did not offer the most technologically-advanced NGS tests, which led to a significant decrease in revenue as current and prospective customers went elsewhere for their testing needs; (ii) NeoGenomics’ costs were not fixed because NeoGenomics needed to hire additional employees to process more complex customized testing demanded by customers utilizing NeoGenomics’ outdated portfolio of tests, leading to operational challenges, decreased lab efficiency, and increased testing turnaround times; and (iii) NeoGenomics violated federal healthcare laws and regulations related to fraud, waste, and abuse.
On November 4, 2021, NeoGenomics revealed that it was “conducting an internal investigation, with the assistance of outside counsel, that focuses on the compliance of certain consulting and service agreements with federal healthcare laws and regulations” and had recently “notified the Office of Inspector General of the U.S. Department of Health and Human Services (‘OIG’) of [NeoGenomics’] internal investigation.” Additionally, NeoGenomics disclosed that it “accrued a reserve of $10.5 million in other long-term liabilities . . . associated with the federal healthcare program revenue received by [NeoGenomics].” On this news, the price of NeoGenomics common stock fell by more than 17%.
Then, on March 28, 2022, NeoGenomics disclosed that its CEO, defendant Mark Mallon, would step down as CEO and member of the Board of Directors effective immediately. NeoGenomics also revealed that it “currently expects revenue for Q1 2022 may be below the low end of its prior guidance of $118 - $120 million and [earnings before interest, taxes, depreciation, and amortization (‘EBITDA’)] for Q1 2022 will be below the low end of its prior guidance of $(15) - $(12) million. The larger than anticipated EBITDA loss was primarily driven by higher than anticipated Clinical Services cost of goods sold.” Additionally, NeoGenomics withdrew its 2022 annual financial guidance issued on February 23, 2022. On this news, the price of NeoGenomics common stock fell by nearly 30%.
Finally, on April 27, 2022, NeoGenomics reported that revenue for its first quarter of 2022 was $117 million and EBITDA loss was $19 million, that “[c]onsolidated gross profit for the first quarter of 2022” had “a decrease of 8.0% compared to the first quarter of 2021,” and that “[o]perating expenses increased by $34 million, or 59%, compared to the first quarter of 2021.” NeoGenomics further disclosed that “our test mix is weighted to legacy modalities and disease-specific NGS offerings, while the market is moving towards larger, more comprehensive panels” and “we’ve seen a notable decrease in lab efficiency over the course of the past year . . . largely attributable to increased complexity of both our product offerings and our lab processes, due in part to efforts to respond to customer requests for customization.” NeoGenomics also revealed that it was “seeing some increased competition on the NGS front as panels move or as customers move to demanding larger, more comprehensive NGS-only panels, and our offering is more oriented towards smaller targeted panels” and that NeoGenomics was “seeing bigger and bigger panels coming from some of these emerging companies . . . where we have not kept up.” On this news, the price of NeoGenomics common stock fell an additional 3.8%, further damaging investors.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased or acquired NeoGenomics securities during the Class Period to seek appointment as lead plaintiff in the NeoGenomics class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the NeoGenomics class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the NeoGenomics class action lawsuit. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff of the NeoGenomics class action lawsuit.
ABOUT ROBBINS GELLER: Robbins Geller is one of the world’s leading complex class action firms representing plaintiffs in securities fraud cases. The Firm is ranked #1 on the 2021 ISS Securities Class Action Services Top 50 Report for recovering nearly $2 billion for investors last year alone – more than triple the amount recovered by any other plaintiffs’ firm. With 200 lawyers in 9 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. Please visit the following page for more information:
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